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While Europe fares better than last year because of its gradual economic recovery, the survey shows most big emerging markets have dropped in the rankings as economic growth and foreign investment slow.

The report says Japan is three notches up because a weaker currency has helped improve its competitiveness abroad.

“The overall competitiveness story for 2014 is one of continued success in the U.S., partial recovery in Europe, and struggles for some large emerging markets,” said Prof. Arturo Bris, director of the IMD World Competitiveness Center.

The report says seven of the top 10 countries in the overall ranking for 2014 are also in the top 10 for having an image abroad that encourages business development.

“In general, there is a strong correlation between a country’s overall competitiveness ranking and its international image as a place to do business.”